Question

39) You just received a loan from your banker to buy seed and plant your com field. The loan is a discount loan and is for $5,000 for 1 year and the quoted rate was 10 percent. What is your APR? 39) с 14.33% 12.23% D) 10.00% none of the above Your brother, a banker, has just approved a loan for you, an add-on interest loan. You will 40) borrow $2,000 for one year with a 12 percent annual interest rate. What is your monthly payment? 40) S166.67 B) $240.00 $186.67 D) $256.78 E) none of the above 41) You are headed to the mountains for some climbing this summer and you need some gear. The local mountaineering shop is offering 6 percent financing on all purchases before the end of the month. Your savings account is currently paying 5 percent. Which of the following is true? 41) D A) It does not matter where you get the money, it will cost the same. You should seek competent financial help. C) Borrow from the mountain shop-it is cheaper. D) Take the money out of savings-it is cheaper. E) none of the above

Answer 1

39. Option C, 11.11%

NPER	1
FV	5000
PMT	0.00
PV	4500.00	[5000*90%]
Rate	11.11%	[Rate ( nper, pmt,-pv,fv)]

40.   Option C, $186.67

41. Option D, take money out of savings - it is cheaper

41.